U.S. Clears Vessel-Sharing Alliance ‘The Alliance’

The U.S. Federal Maritime Commission (FMC) has completed its review of the proposed vessel-sharing alliance “THE Alliance”, allowing the grouping to become effective on December 19, 2016.

THE Alliance is comprised of five different container shipping companies: Hapag-Lloyd; K Line; MOL; NYK; and Yang Ming. It plans to deploy 240 ships across 31 services and over 75 ports in Asia, North Europe, the Mediterranean, North America and the Middle East.

The Commission voted to allow the agreement to become effective following a period of substantive and constructive discussion with the parties.

The application on THE Alliance plan to establish a vessel-sharing agreement was submitted to the FMC on November 4, 2016. The Commission says it made no Request for Additional Information, clearing the way for the agreement to come into force within the initial 45-day review period.

Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.

“I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement,” stated Federal Maritime Commission Chairman Mario Cordero. “This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry. Considerable review and analysis goes into assessing a final agreement before it is allowed to go into force and I am grateful for the hard work of Commission staff.”

The scope of this agreement applies only to trade lanes between the United States and other nations, the FMC noted. Not covered is cargo moved by carriers in THE Alliance that does not originate or terminate in the United States.

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.

Aaccording to Alphaliner, THE Alliance will be the smallest of the three major shipping alliance groups operating between Asia and Europe. The others are the 2M (+ HMM) and Ocean Alliance.

The Alliance is expected to begin service in April 2017.

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